How to Correct Your AIS and Avoid an Income Tax Notice

ITR Filing Alert: How to Correct AIS Mismatches and Avoid a Tax Notice

A single mistake in your Annual Information Statement (AIS) can lead to an automated tax notice. With the ITR filing season in full swing, it’s more crucial than ever for taxpayers to verify and correct their AIS data. The case of a ₹5 lakh mismatch in a taxpayer’s statement serves as a powerful reminder of this.

Your AIS is a comprehensive summary of your financial transactions, and the Income Tax Department uses it to cross-verify the information in your ITR. Any discrepancy can flag your return for scrutiny.

Common Errors to Watch Out For

Tax advisory experts point to these frequent issues that cause AIS mismatches:

• Capital Gains: The AIS might show the closing price of a stock instead of the actual sale price, inflating your reported capital gains.
• Real Estate Duplication: For jointly owned properties, the full transaction value can be incorrectly reported under both co-owners’ PANs.
• FD Interest: Interest on fixed deposits may be incorrectly shown in a lump sum at maturity, even if it’s been taxed annually.
• Wrong Entries: Incorrect PANs, duplicate reports from brokers, or transactions from the wrong financial year are also common.

Step-by-Step Guide to Fixing AIS Errors

The good news is you can correct these errors directly on the income tax portal. Here’s how:

1. Log in to your account on the income tax e-filing portal (incometax.gov.in).
2. Go to Services (or e-File) → Annual Information Statement (AIS).
3. Select the relevant financial year and open the AIS document.
4. For the specific transaction with an error, click on ‘Add Feedback’ or ‘Optional’.
5. Choose the most fitting reason for the correction from the list provided, such as “Information is not fully correct” or “Information is duplicate.”
6. Enter the correct details (amount, date, etc.) and add a short remark (e.g., “Actual sale value as per contract note”).
7. Submit your feedback. You will receive an acknowledgment, and the department will verify the changes with the source of the information (e.g., your bank or broker).

Keep an eye on the feedback status to ensure your corrections are accepted. Proactively reconciling your AIS with your personal records is the best way to ensure accurate ITR filing and avoid unwanted tax notices.